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12 JUNE 2013 CREDIT CONTROL AND INDIGENT MANAGEMENT. The Steve Tshwete Municipality Experience AMOS TWALA (AIMFO) ASSISTANT :DIRECTOR TREASURY IMFO MPUMALANGA CHAIRPERSON. Effectiveness creates profit, Efficiency maximises it. General Perception: CFO only responsible for credit control - PowerPoint PPT Presentation
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04/20/231
12 JUNE 2013CREDIT CONTROL
AND INDIGENT MANAGEMENT
The Steve Tshwete Municipality Experience AMOS TWALA (AIMFO)
ASSISTANT :DIRECTOR TREASURY IMFO MPUMALANGA CHAIRPERSON
04/20/232
Effectiveness creates profit, Efficiency
maximises it.General Perception:
CFO only responsible for credit control
Totally distanced from other departments
Job of Juniors Seniors only involved with
prominent cases
04/20/233
BATHO PELEThe deterioration of debtor payment goes hand in hand with poor customer care.
Eight Batho Pele Principles: Consultation Service Standard Access Courtesy Information Openness and Transparency Redress Value for money
04/20/234
PERFORMANCE RESULTS OF THE STEVE TSHWETE MUNICIPALITY Average payment rate
2009/2010 100.04% 2010/2011 100.04% 2011/2012 101.29%
Outstanding Consumer debtors >60 Days: 2009/2010 R 16 518 229 2010/2011 R 22 745 853 2011/2010 R 26 209 820
04/20/235
PERFORMANCE RESULTS OF THE STEVE TSHWETE MUNICIPALITY Outstanding debt: Total Annual
Consumer levies:- 2009/2010 7.5% 2010/2011 5.74% 2011/2012 5.02%
Monthly Debtors / days: 2009/2010 27 Days 2010/2011 20 Days 2011/2012 18 Days
04/20/236
THE VARIOUS STAGES OF CREDIT CONTROL AT STEVE TSHWETE MUNICIPALITY
1994 Middelburg Town Council amalgamated with Mhluzi
Town Council (Formal Middelburg TLC)
Payment rate less than 10% in Mhluzi Flat rate for electricity (including payment for water) Prepaid electricity in Mhluzi and conventional in
Middelburg Prepaid operated by private contractor Electricity distribution loss 79% No meters were read
1996 Uniform tariff structure for entire TLC All meters cleaned – read monthly Electricity distribution loss 9% Payment rate +- 92%
04/20/237
THE VARIOUS STAGES OF CREDIT CONTROL AT STEVE TSHWETE MUNICIPALITY
2001 Middelburg TLC combines with Hendrina (and
Kwazamokuhle) TLC and parts of Middelburg TRC – Form Middelburg Local Municipality (became Steve Tshwete in 2004)
Payment rate less than 10% in Kwazamokuhle Prepaid operated by private contractor – Loss paid by
TLC from other sources at +- R 60 000 per month Electricity distribution loss at 56%
2010 Payment rate +/- 99% Electricity distribution loss 9.73% All meters cleaned, repaired and being read
04/20/238
DEBT MANAGEMENT IN A FIRM COMMUNITY PARTNERSHIP
Service provision regulated by acceptable / supportive Policy and By-Laws Service standards and consumer services Credit control and debt collection Control of Services Indigent support and free basic services
Mun
icip
al C
ounc
il
Municipal Administration
Com
munity
Community partnership
04/20/239
DEBT MANAGEMENT IN A FIRM COMMUNITY
PARTNERSHIP Services provision only by legitimate
connections No services provision without service
agreement Total process supported by delegated
authority
“ IT IS SURVIVAL NOT BRAVERY THAT MAKES A MAN TO CLIMB A THORN
TREE ”
04/20/2310
SERVICE CONSUMPTION MUST BE METERED.
All service connections must be metered
Meters suitable to application Defects immediately reported Meter replacement programme Pre-paid electricity metering Standardizing of meters Regular audit of meters Controlled on GIS Units of un-metered service simple
and understandable
04/20/2311
READING OF METERS Electronic Terminals (Route Master) Monthly read at similar date All meters read Accessibility – deviations reported Text messages (SMS) to consumers Notes from the meter readers Deviation keyed in on terminals Immediately dealt with Meter Reader Contractors Checking defaults separate from
readers
04/20/2312
FIXED INTERNAL WORK SCHEDULE
Exact and comprehensive planning Regular fixed dates / strict compliance All work processes covered Serve as guidance for all planning Provide sufficient time for each
process Ensure all work covered and within
limits Rigid Consistent
04/20/2313
MONTHLY CONSUMER STATEMENTS Combined Statement Clear understanding lay-out Reflect all transactions for the month Reflect meter readings and consumption Reflect all tariffs (even on sliding scales) Include a last payment date Contain a notice of service termination
if not paid at due date Contain clear and correct address
(Obtain PAM Certificate – twice (2) per year)
Allow for a fourteen day payment period from delivery to final pay date
In the official communication language of the Municipality
04/20/2314
PAYMENT FACILITIES 12 Own pay points spread over municipality Available to public – 60 hours per week 3 ATM vending machines Available 24 hours / 7 days 6 Receptors at garages available 24 hours/7
days A pay point within 4 km from any residential
premises 14 days payment period before due date Credit card / Debit card facilities Accept Electronic payments Identity numbers for direct deposits Accounts listed for bulk consumers No pre-paid electricity sold if basic account not
up to date
04/20/2315
ACCOUNTS NOT PAID BY DUE DATEPayment extension subject to:
Sign acknowledgement of Debt / payment understanding
Regulated by delegated authority
Prior warning arrangement: Telephone call to responsible person Text messages (SMS) to cell phones Letters to larger consumers
Termination of services Private contractor All on one day (early as possible) Re-connection fees Adjustment of deposit Accountant on standby until 21:00
04/20/2316
FIRST 14 DAYS: FINAL NOTICE
Service Termination without payment followed up Restrict water meters Disconnect at pole
Final Notices for: Non-payment after termination Services that can not be terminated
Transfer lessee debt to owners account Arrange to attach lessee’s rent Removal of tampered pre-payment meters Penalty for electricity theft Awards for information on illegal use
04/20/2317
NEXT 30 DAYS: PERSONAL INTERACTION
Difficult accounts handed to independent debt collector: On percentage basis Can not institute formal legal action Must not disturb consumer relations Can not collect payments
Lists provided to Ward Councillors: Interact with defaulters Visit cases of payment resistance Report findings Report on needy cases
04/20/2318
INDIGENT SUPPORT / FREE BASIC SERVICES
Formal enlistment Only consumers of all four consumer services Restricted to 20 ampere electricity demand Can only revert back if account is up to date Receive free basic services:
Assessment Rates 100% 50 kWh electricity per month 10 kl water per month Free sewerage Free refuse removal
Water restriction if consumption exceeds 15 kl per month
+/- 15500 indigents listed Include child headed households
04/20/2319
AFTER 60 DAYS: HAND OVER
Three different law firms appointed Follow full debt collection process until
attachment of property Sale in execution of properties but only
if: Empty stands Empty houses Business premises
Attachment remain for period granted and immediate sale arrangement by sheriff: When house becomes empty Occupiers change
04/20/2320
BAD DEBT IDENTIFICATION
Each step in debt collection process coded Once identified irrecoverable, list for
approved to write off Prevent “dead wood” on debtors register Delegations to CFO for all debt less than
R2000, above R2000 item to council
HANDLING OF GOVERNMENTS ACCOUNTS THAT ARE ARREARS
A report of all government accounts that are in arrears is prepared by the Accountant income and forwarded to the provincial treasury and the national treasury department on monthly basis
Monthly engagements with identified officials on the payment of accounts
Regular meetings with officials from government departments
04/20/2321
QUESTIONS
04/20/2322
04/20/2323
THANK YOU
SIYABONGA